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This article by David McMullen was originally published in September 1993 in the journal “Red Politics”.There was also discussion of the review at the lastsuperpower site in 2006.

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Bill Warren’s book, Imperialism, Pioneer of Capitalism, performs a useful service by refuting much of the mythology that the left has embraced in the name of ‘anti- imperialism’. However, on the other hand, he manages to create his own brand of confusion. He does this, firstly, by blaming Lenin’s Imperialism the Highest Stage of Capitalism for many of the left’s erroneous views.

And secondly, he is so busy extolling the historical mission of capitalism, that no effort is devoted to discussing how capitalism is an obstacle to human development and is becoming increasingly obsolete. Neverthelsee, despite these shortcomings it is the myth shattering quality of the book that predominates.

Warren begins by reminding us of the basics of a Marxist attitude to capitalism:

(a) It is an advance in all respects on earlier forms of society.

(b) It develops the productive forces and society generally, so creating the necessary material or objective conditions for future communist society. This development also generates the contradictions which lead to capitalism’s revolutionary overthrow.

The following passage from the Communist Manifesto that Warren quotes (Warren 1980, p 11) says it all.

The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society. Conservation of the old modes of production in unaltered form, was, on the contrary, the first condition of existence for all earlier industrial classes. Constant revolutionizing of production, uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. All fixed, fact-frozen relations, with their train of ancient and venerable prejudices and opinions, are swept away, all new-formed ones becomes antiquated before they can ossify. All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real condition of life, and his relations with his kind. (Marx and Engels, 1968, pp 34-5.)

This approach to capitalism is at total variance to that prevailing in the “left’, The usual practice is to bemoan the development of capitalist productive relations and productive forces, and to cherish the things that capitalism is destroying. A few examples might clarify this point.

(1) Increased economic concentration and the destruction of the petty bourgeoisie. A classic case of the left’s response is its bemoaning such things as agribusiness, supermarkets and fastfood chains.

(2) The increasing internationalisation of capital and the division of labor, which increases human intercourse on a world scale and lays the basis for a global society. This is denounced for destroying our independence and national heritage and placing us at the mercy of the multinationals.

(3) The destruction of cherished skills by new technologies (cherished, that is, by trendy left sociologists). To a Marxist, technological development is eliminating the technical division of labor which is the material basis of class society. In other words we are moving to a situation where you will have an educated and versatile workforce, on the one hand, and on the other hand, processes of production in which all types of activities can be performed equally by all members of the workforce.

(4) The erosion of traditional culture and social bonds. Traditional life tends to be romanticized, compared with soulless modern living We have lost something. On the other hand, to a Marxist the neuroses and instability of modern life are infinitely superior to the narrow mindless certainty and security of days gone by.

So given that capitalism is a social advance and creates the conditions for social revolution, how are we to view European colonial expansion into pre-capitalist societies?

Warren cites, by way of example, Marx’s recognition of the historically progressive role of Britain’s penetration of India.

England, it is true, in causing a social revolution in Hindoostan, was actuated by the vilest interests, and was stupid in her manner of enforcing them. But that is not the question. The question is, can mankind fulfill its destiny without a fundamental revolution in the social state of Asia? If not, whatever may have been the crimes of England, she was the unconscious tool of history in bringing about the revolution. (S. Avineri (ed.) pp 93-94.)

Not long afterwards, Marx wrote as follows:

England has to fulfill a double mission in India: one destructive, the other regenerating – the annihilation of old Asiatic society, and the laying of the material foundations of Western society in Asia (S. Avineri (ed.) pp 132.)

On the destruction side, they broke up or seriously undermined much of the existing social fabric and pre- capitalist modes of production. On the construction side, political unity was greatly enhanced by the British sword (mainly in the hands of local recruits), telegraph and railways, and embryonic industrialization began to emerge.

It is appropriate that the anti-colonial struggles of the twentieth century have not simply been directed at expelling the foreign oppressor. Rarely was the struggle simply one of returning to the days before colonial rule. For example, the struggle for independence in India was not directed at restoring the Mogul empire and independence in Africa did not mean returning to tribal hunter gathering or slash and burn societies.

In some cases such as in China, the revolution was directed at the total destruction of the traditional conditions that predated colonialism such as the remnants of feudalism. Even where independence from colonialism was not accompanied by fundamental social revolutions, the essential aspect of decolonisation was the establishment of a modern state, and the first steps towards a modern economy.

In the case of Czarist Russia, the modern industrial sector, which spawned the proletariat in the two decades prior to 1914, was primarily the product of foreign investment. At no stage did the Bolsheviks target this foreign ownership as something to be abhorred, an interesting point in the light of the economic nationalist position adopted by most of the Australian left.

To quote Warren:

Between 1896 and 1900 a quarter of all new companies formed were foreign, and by 1900 foreign capital accounted for 28% of the total. By 1914 the proportion had risen to 33%. Foreign capital controlled 45% of Russia’s oil output, 54% of her iron output, 50% of her chemical industry, 74% of her coal output. More than half of the capital of the six leading banks of the country – themselves controlling nearly 60% of all banding capital and nearly half of all bank deposits – was foreign (Warren 1980, p 46.)

The position commonly adopted by the left is to deny that capitalism is fulfilling its historical function in the developing countries. We are told that capitalism is not developing the productive forces nor is it destroying pre-capitalist conditions. The LDCs are supposedly being underdeveloped by the world capitalist system. A major part of Imperialism, Pioneer of Capitalism is devoted to refuting these views. The linchpin of these views is the modern theory of imperialism, dependency and underdevelopment. Typical of the theorists in this area are Paul Baran, Andre Gunder Frank and Samir Amin.

We are told that the people of the Third World have been getting progressively worse off during the modern era (ie since the industrial revolution) and have generally experienced a socio-economic and cultural regression. Capitalism has developed, and continues to do so, in a contradictory fashion, which generates at the same time development in the centre and underdevelopment in the periphery.

The implication is that it is fruitless to expect underdeveloped countries to repeat the stages of economic growth passed through by modern developed capitalist economies whose classical capitalist development arose out of pre-capitalist and feudal society. Hence, the historical role of capitalism in these countries is finished, or at a dead end. It is argued, moreover, that the achievement of political independence has not significantly improved prospects of development in the periphery.

A number of arguments are put forward to support the above position. Warren picks out three as being particularly important.

(a) A drain of economic surplus from periphery to centre is said to arise from the flow of profits from foreign investment in the periphery back to the metropolitan country, and from unequal exchange in trade.

Warren points out “that for such a drain to retard economic development it must be an absolute drain not simply an unequal transaction that nevertheless leaves both sides better off than before …”. For example, the comparison that people make between profit outflow and capital inflow tends to be very misleading. Surplus extraction under capitalism is not comparable to the plunder practiced by the empires of antiquity.
Foreign investment creates the surplus (with the help of local labor of course) before it extracts it; and it does this by developing the productive forces. You can certainly criticise the form taken by foreign investment and trade, and argue that Third World countries would gain if they were better organised. What you cannot argue is that the wealth of Third World countries is being depleted.

Closely related to this surplus gain concept is the idea that developed countries are better off than others because they have more than their share of the world’s resources. In other words the reason why we have better plumbing than people in Bangladesh is because we have more than our share of the world’s supply of pipes and trained plumbers.

Or to put it more generally, there is a fixed quantity of some substance called prosperity and the more that goes to one lot of people the less there is for everybody else. This is a total failure to understand economic development as a process of economic accumulation. Its most negative effect is the implication that the interests of people in the developed and underdeveloped world are at loggerheads.

(b) The ‘traditional’ division of labor between centre and periphery countries whereby the former produce manufactured goods and the latter primary goods, is seen to be imposed by the centre on the periphery and is a source of its backwardness.

Warren argues that the validity of the argument rests on two assumptions, which he sets out to refute. These are first that there was a possible and desirable alternative line of development to primary-product, export-lead growth in the backward countries concerned; and second, that the initial emphasis on the export of primary products actually erected serious impediments to subsequent diversification, especially along the lines of industrialisation.

(c) Imperialism or centre/periphery relations are said to encourage the preservation of precapitalist modes of production. This is discussed at two levels. First, there is the case where capitalist production at one point encourages pre-capitalist production at another point (eg, cotton production based on slavery). Here Warren correctly argues that the destructive force of capitalist relations would far outweigh any conserving tendencies.

Second, there is the claim that imperialism has tended to ally itself with local feudalism at the expense of progressive bourgeois forces. Warren replies thatthis is largely undercut by the almost universal willingness of feudal classes to transform themselves, at least partly, into capitalist industrialisers once conditions are ripe. Where

Warren falls short on this question in failing to emphasise that a thoroughly bourgeois revolution would far more successfully unleash capitalist development.

At a more general and theoretical level Warren attacks dependency theory on a number of grounds.

To begin with it is a static view. While a change in form over time tends to be conceded, the possibility of declining dependency is precluded. Moreover, changes in the centres of power is inadequately allowed for.

The theory is ahistorical in that it assumes the following:

(a) that there were latent suppressed historical alternatives to the development that actually took place; (b) that the failure of alternatives to materialise was primarily the result of external imposition (colonial policy).

The theory is metaphysical in that it basically explains social phenomenon in terms of external causes, rather than as an interaction of both internal and external factors. (Mao spoke of external factors as the conditions of change and internal factors as the basis of change.) Dependency theorists would, for example, explain a country’s backwardness by the fact that foreign capital is only invested in enclaves or cash crops.

A more sensible approach would perhaps be to see cause and effect running the other way – because the country is backward these industries are the only opportunities for investment. The backwardness would then be explained essentially by internal factors, namely a social system and mode of production significantly inferior to, or historically less advanced than, capitalism in developed countries.

Dependency theory has a strong thread of nationalist utopia, which establishes a set of thoroughly dubious criteria of what is good and what is detrimental. The first blossoms of bourgeois society are denounced simply as imperialist cultural penetration (coca cola culture) serving the interests of the mutinationals and reinforcing dependent status.

There is also the concept of articulated economy. Every country has to have its own steel industry, for example. It is argued that if you do not have the full range of industries you are trapped into some narrow and enslaving international division of labor.

This last point touches on a major area of confusion, namely, the distinction between dependence and interdependence. Warren says:

Since national economies are becoming increasingly interdependent, the meaning of dependence is even more elusive, not to say mystical.(Warren, 1980, p 182)

In fact with the increasing importance of international trade and capital movement, it is often the case that dependence on trade and foreign investment is a sign of economic development.

The last section of Warren’s book provides extensive evidence that considerable economic development has occurred in the Third Word during the post-war period. It has been meteoric in comparison with that in western countries. The western countries took centuries to emerge from the Middle Ages and eventually achieve an industrial takeoff in the nineteenth century.

On Lenin’s views of imperialism

In Warren’s opinion, the more recent theories of imperialism, such as underdevelopment and dependency are best regarded as post-war versions of the views expressed by Lenin in Imperialism, the Highest Stage of Capitalism,or at any rate stemming, or continuing, from where he left off. Warren also claimed that in this book Lenin was espousing views that were at variance with his earlier writings on the Narodniks and the role of capitalist development in Russia.

Here Warren is skating on thin ice. Much of his case rests on Lenin’s use of particular words, especially ‘moribund’, ‘stagnant’ and ‘parasitic’. By ‘moribund’, Lenin is referring to the increasing obsolescence of capitalism, exemplified most starkly by two world wars and economic crises of the sort that hit in the 1930s and will hit again in the future. He is not saying that social and economic development ceases.

In his use of the word, ‘stagnation’, Lenin is not saying that capitalism is no longer revolutionising the productive forces – a proposition that would obviously be wrong. He is referring to its increasing tardiness relative to a communist organisation of production – the productive forces are outgrowing the capitalist mode of production.
Warren tries to equate Lenin’s description of monopoly capital and imperialist countries as parasitic with the crude “surplus drain’ view . However, Lenin is not denying that the export of capital develops the productive forces in recipient countries; he is just saying that the centralisation in the ownership of capital shows up geographically.

Places such as London and New York have a far higher than average proportion of the world’s bloodsuckers; they tend to be richer and their ‘portfolios’ span the world. When Lenin explicitly discussed the impact of imperialism on the then colonies, he said that it was developing the productive forces. Warren unjustifiably shrugs this off as lip service to Marxist orthodoxy.

Warren had a number of other criticisms of Lenin’s position. However, they are not central to our present discussion. He claims (a) that capital exports have not increased in signifcance, (b) that Lenin espoused underconsumptionism and (c) that inter-imperialist rivalry was based on trade rather than competing capital. These and other issues could perhaps be looked at on some other occasion in a fuller discussion of Lenin’s book.

… it is no task of the “left” to support protectionism and try to retard the integration of the world capitalist market. We can only support “Free Trade”, not oppose it – but in the same revolutionary and critical spirit that Karl Marx did.

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11. c) Limits to Growth

Depletion of non-renewable resources is another fashionable attempt to find some barrier other than capital itself. The club of Rome’s project, and all derivatives, carry out exactly the same exercise as Malthus in comparing geometric growth of consumption to arithmetic growth of production and drawing tautologous conclusions.

Of course it’s true that any positive rate of growth, no matter how small, must eventually (and in fact quite quickly) exhaust any finite non-renewable resources. But if this spells doom for industrial society, then it should be added that any positive rate of consumption at all even if there is a declining rate instead of growth, must also eventually exhaust any finite non-renewable resources, though it may take longer. The issue is whether “resources” are “finite”. If they are then we are doomed, growth or no growth.

As Ehrlich points out, with any positive rate of population growth, humanity would eventually occupy a volume larger than the planet earth and expanding faster than the speed of light. But what does this actually have to do with the real and pressing problems of the world we really live in?

Again the Liberal answer to these themes is straightforward and irrefutable:

“As an historical fact, the long-term trend has been for the cost of mineral inputs to decline as a proportion of total production costs. Numerous studies of the available statistical data, spanning more than a century, have demonstrated that the tendency during this phase of unprecedented growth in the world economy and in the use of minerals has not been towards scarcity but towards abundance. In the United States the real cost of minerals output was less than one-half the average 1870-1900 level by 1929; and by 1957 it was less than one-half the 1929 level…(ibid p33)

…Such resources may be being ‘used up’, but they are also – and as an integral part of the same process- being ‘created’. It is in the twentieth century that the essential uniformity of energy and matter has been discovered, that the development of new synthetic materials has become almost commonplace, and that technological advance has become virtually continuous, each improvement creating new opportunities for further advance. The extension of knowledge about the world has not only confounded past predictions of resource scarcity but has been in directions which make such predictions less and less defensible as time goes by.” (p39)

Since such predictions are less and less defensible, why are they also more and more popular? It seems clear that the degree of rejection of this “bourgeois optimism” is not related to the degree of one’s knowledge of industrial processes, but to the degree of one’s rejection of modern society. Those who recognise there is a barrier, but do not fully understand the barrier is capital itself, look for that barrier in something else, like “Limits to Growth”.

12. d) Third World Dependency

This theme has been adequately refuted by Bill Warren, who belongs to the Social Democratic rather than purely Liberal trend. As a Social Democrat, Warren tends to defend imperialism, playing down its contradictions in a Kautskyite way opposed to Leninism, although some of this can be excused as iconoclastic shock treatment against the excesses of “dependency theory”. Warren’s refutation of the “radical” conventional wisdom about the Third World is quite crushing and no serious attempt has been made to refute him.

It is a historical fact (not emphasised by Warren) that the development of technology and economic growth has been extremely uneven, with imperialist exploitation of the poor nations by the rich (just as internally too, industrialisation has meant the exploitation of the poor by the rich and polarisation of society).

But it is equally a historical fact (denied by dependency theorists), that imperialism has meant the more rapid spread of capitalist social relations throughout the world and that far from becoming more and more dependent, the backward countries are proceeding very rapidly along the same path of commercialisation and industrialisation that Europe undertook a few hundred years ago.

The world is becoming more polarised, with even imperialist “second world” countries joining the Third World in suffering from superpower exploitation and domination, but it is doing so in the course of a rapid progressive social development – just as the internal polarisation of capitalist societies into a smaller and smaller handful of exploiters (the Rockefellers and such) against a larger and larger proletariat including the ruined middle classes, was also part of a progressive social development.

Lenin’s classic work “The Development of Capitalism in Russia” described this process, which is now taking place in most Third World countries,as it took place in the then backward agrarian and semi-feudal Tsarist Russia. Answering the Narodnik “dependency theorists” of his day: “The Russia of the wooden plough and the flail, of the water-mill and the hand loom, began rapidly to be transformed into the Russia of the iron plough and the threshing machine, of the steam-mill and the power-loom. An equally thorough transformation of technique is seen in every branch of the national economy where capitalist production predominates. This process of transformation must, by the very nature of capitalism, take place in the midst of much that is uneven and disproportionate: periods of prosperity alternate with periods of crisis, the development of one industry leads to the decline of another, there is progress in one aspect of agriculture in one area and in another aspect in another area, the growth of trade and industry outstrips the growth of agriculture, etc. A large number of errors made by Narodnik writers spring from their efforts to prove that this disproportionate, spasmodic, feverish development is not development.” (Collected Works Vol 3, p597)

Precisely because the Third World is industrialising, its importance in world affairs is greatly increasing, to an extent that has not been recognised by most Western “radicals”. This profound social change which is affecting some two thirds of the world’s people is obviously of enormous importance and cannot simply be dismissed.

We have lived through the post-war decolonisation and have only recently experienced the defeat of the USA by Vietnam, as well as the general rise of the Third World in the United Nations. It is quite clear that economic growth and technical progress has not reinforced the conditions for dependence, but has been abolishing the situation which made it possible for backward regions to become colonies or “mandated territories” of the “civilised countries” who bore the “white man’s burden”. “Countries want independence, nations want liberation, and the people want revolution”.

On an international scale, the trans-national corporations are creating and uniting an international proletariat to be their grave diggers, as earlier the bourgeoisie broke down local boundaries and created nations with a national proletariat, In defending national independence and other democratic rights, it is no task of the “left” to support protectionism and try to retard the integration of the world capitalist market. We can only support “Free Trade”, not oppose it – but in the same revolutionary and critical spirit that Karl Marx did.

13. e) Consumerism

Instead of the “old-fashioned” socialist critique, which condemned capitalism, even in England, the richest capitalist country of the time, for holding down the living standards of the masses,we have a “new” critique which condemns it for inundating us with “useless” and “wasteful” products. Although often coupled with moralising lectures about the poverty of people in Third World countries, this is really quite irrelevant to the issue and the “new” theme bears a strong resemblance to the old “barracks communism” of Weitling.

Certainly some quite useless and even harmful products are sold because of advertising and this should be opposed. But people who make “consumerism” their theme are talking about something more fundamental than that, and calling for a far reaching change in Western consumption patterns towards a “simpler” and allegedly more “wholesome” lifestyle based on “necessities” and with less emphasis on “unnecessary” consumer durables, “gadgets”, motor vehicles etc.

It is not clear whether these changes are to be compulsory, with restrictions to prevent people from buying the dishwashers, cars or electric toothbrushes that our “radicals” disapprove of, by inhibiting their production. Or is it to be voluntary, with a massive propaganda (advertising) campaign to dissuade people from buying products the “radicals” don’t like?

Either way involves an enormous elitist contempt for the common sense of ordinary people. Part of this is a reaction against the political backwardness which has led many people to accept the continuation of capitalism without revolt, in exchange for the post-war “affluence” (a mess of potage). Understandable as this is, it is still elitist.

People are entitled to want, and to be satisfied to get, access to things that used to be regarded as luxuries. There has been a very substantial improvement in mass living standards since the 1930’s and it is hardly surprising that while the post-war boom continued, the capitalist social order was relatively stable. Not only material standards, but also the “quality of life” with access to culture, education etc has improved with the rise in real wages (even if the value of wages in terms of labour time has declined, exploitation increased and the social position of workers worsened). There are even some progressive aspects to the way capitalism stimulates new “wants” to expand its markets.

The higher standards of living which have been achieved involve an increase in people’s expectations and their determination to defend the greater dignity that they have won. It is sheer arrogance to condemn all this as “consumerism”. People will revolt when they find that the existing social order cannot provide them with what they want, not when some “radical” persuades them that they shouldn’t want it. Now that living standards are again starting to decline, we will see whether the generation that was brought up on “consumerism” will put up with more or less shit from capitalism than their parents did in the last Great Depression. From general attitudes towards “authority” etc, it seems likely that the “consumerist” generation will be more ready to revolt, not less.

At least Malcolm Fraser’s proposal to reduce living standards by cutting real wages is more democratic than the “radical” attacks on consumerism. Why can’t the radicals who oppose “wasteful consumption” settle for demanding a general wage cut? This would leave people free to choose for themselves without manipulation what they regard as necessary and what “wasteful” items they could do without.

Of course I’m not saying we’ll all still have private cars after the revolution despite the various social problems that go with them. We’ll have helicopters and spaceships. (“We want bread and roses too…”)

To be continued. Next installment, Part 3, Technocratic priesthood, Centralization and Unemployment…